A Report on

MEDIA AND ENETERTAIMENT INDUSTRY

By

RAHUL SOMAN | 1226113143

Under the Guidance of

Dr. Shahazadi Begum Shaik

Executive Summary

he Media and entertainment (M&E) industry in India is likely to touch Rs 43,600

crore by 2016-17 from Rs 23,900 crore in 2012-13. The south Indian market is

dominated by television (56%), followed by print (28%) and films (11%). TSectors such as new media and radio, though smaller than other mediums, are expected to

grow at rates higher than the industry average, given their increasing power of engagement.

The medium is expected to grow at a compounded annual growth rate (CAGR) of 20% over

the next four years due to the benefits of digitization being realized. As the industry braces

for exciting times ahead, the sector is projected to grow at a CAGR of 14 percent to reach

US$ 28.1 billion by 2015.

The Indian government's push towards digitalization and cable television by 2014, is

expected to drive DTH and digital cable growth. Also, sophisticated digital production and

postproduction complemented by the willingness of big corporate houses to invest in the film

value chain is influencing the film segment in India. 

The rising rate of investments by the private sector and foreign media and entertainment

(M&E) majors have improved India's entertainment infrastructure to a great extent. As per

the recent report by Price water house Coopers (PwC)

IINTROD UCTION

ndia's media and entertainment (M&E) industry registered an overall growth of 12.6 per cent,

from Rs 728 billion (US$ 11.74 billion) in 2011 to Rs 821 billion (US$ 13.24 billion) in

2012, according to a joint report by the Federation of Indian Chambers of Commerce and

Industry (FICCI) and KPMG.

India has a population of over 1.2 billion. The sheer numbers give the M&E industry in the

country a tremendous opportunity for growth. Some time back, the thought of reaching and

engaging with such a vast and diverse population seemed improbable. However, today, the

industry is armed with digital technologies, state-of-the-art mobile devices, penetration of

broadband and digital cinema, and a government that fully backs the sector.

Increasing digitization along with higher internet usage has galvanized the sector over the last

decade. The Internet has almost become the top media for entertainment for most of the

people.

TPROSPECTIVE GROWTH

he media and entertainment (M&E) industry in South India is likely to touch Rs 43,600 crore

by 2016-17 from Rs 23,900 crore in 2012-13, according to a report by consulting firm

Deloitte Touche Tohmatsu India Pvt. Ltd and industry lobby Federation of Indian Chambers

of Commerce and Industry (FICCI). Growth will be driven mainly by the popularity of

vernacular content in the region and endeavors by media vehicles to expand their presence.

The south Indian market is dominated by television (56%), followed by print (28%) and films

(11%). Sectors such as new media and radio, though smaller than other mediums, are

expected to grow at rates higher than the industry average, given their increasing power of

engagement. The television market is estimated at Rs 13,470 crore. The medium is expected

to grow at a compounded annual growth rate (CAGR) of 20% over the next four years due to

the benefits of digitization being realized. At the national level, digitization is changing the

way consumers view television, with broadcasters also seeing an opportunity in creating and

showcasing digital content. While the industry is enabling multi-screen viewership of TV

content for viewers who are constantly on the move, the medium is attracting increasing

number of local advertisers.

All media platforms viz. films, TV, print and radio are pushing content on the digital medium

so as to enhance reach. Not only is the digital medium helping industry players reach wider

audiences, it is also enabling them to establish a stronger connect with consumers.

Print is the second largest segment accounting for 28% of the overall market in 2012-13 at Rs

6,680 crore. English-language publishers are launching vernacular dailies as advertising

revenue from vernacular print in the region is estimated to grow at twice the pace of that of

English, largely driven by local advertisers and increasing focus of national advertisers

beyond the bigger cities.

The print industry is also trying to identify monetization opportunities online by developing

mobile apps and mobile optimized websites. With publishers identifying innovative ways to

reach out to their readers, the print industry is also expected to see a steady CAGR of 8% till

2016-17.

The print industry in South India, where four states represent about 30% of the Indian market

in terms of readership, has been able to maintain its vigor through tough times. The

opportunity will lie in tapping the growth potential of the market through expansion and

deeper penetration while simultaneously building additional capabilities to explore alternate

sources of revenue.

South India also churns out more films than Bollywood. Buoyed by an ardent fan following

in the South, film is the third largest segment of the media and entertainment industry at Rs

2,680 crore. The industry is adopting technology across the value chain—scouting talent

through social media, adopting newer film making technologies in terms of sound and

filming, distributing and exhibiting films digitally as well as embracing e-ticketing platforms.

The industry is expected to see a healthy CAGR of 12% over the next four years.

(S.Bridget Leena, 2013)

INVEST MENTS

Indian consumers can now avail International news channel France 24 as a free-to-air channel

on Doordarshan's DTH platform, DD Direct + and Dish TV, after signing new distribution

agreements in the country. The company revealed that the deal will enable it to reach nearly

38 million TV households; from the earlier 7 million. India is the world's fastest growing

market for audio visual (AV) equipment, according to an industry study by InfoComm.

The AV market in India is projected to enjoy a CAGR of 25 per cent and reach US$ 5.1

billion by 2015, driven by expenditures in sectors such as education, infrastructure and

corporate information technology. By 2015, India could become the third largest AV market

in the Asia–Pacific region, according to Richard Tan, General Manager of InfoComm's Asia

subsidiary.

ICICI Venture, one of India's biggest equity firms, with assets of around US$ 2 billion, plans

to invest about Rs 150 crore (US$ 24.18 million) in Adlabs Imagica, a theme park operated

by Adlabs Entertainment Limited, on the Mumbai–Pune expressway. This will be the equity

firm's first investment in this field. Adlabs Imagica started in April, 2013.

It is a Rs 1,600-crore (258.09 million) theme park spread over 300 acres. It accommodates as

many as 20,000 visitors every day and aims to achieve 3 million visitors in its first year of

running. The M&E industry in South India could grow at a CAGR of 16 per cent and touch

Rs 43,600 crore (US$ 7.04 billion) by 2016–17 from Rs 23,900 crore (US$ 3.85 billion) in

2012–13, as per a report by consulting firm Deloitte and FICCI. This growth will be driven

by the popularity of vernacular content and the efforts by media vehicles to expand their

presence.

The South Indian M&E market is led by television (56 per cent), followed by print (28 per

cent) and films (11 per cent). Segments such as new media and radio are also expected to

grow at a better rate than the media average. The online portal for the Bharat Nirman

Campaign has been launched. The portal offers an interactive digital platform for the creative

campaign on several schemes and programmes. The portal allows the user to get information

about the schemes at a single place, apart from providing live integration with social media

platforms such as Facebook, Twitter and YouTube.

(India Brand Equity Foundation, 2013)

IMPACT OF DIGITAL MEDIA

Broadcasters are using digital media to foster greater engagement with young audiences who

are increasingly online and multitasking while watching TV.46 Young audiences are

increasingly looking for an online experience that complements traditional TV programming,

including exclusive video and gaming content and social media that they can consume at their

convenience. Approximately 40% of active Indian internet users consume TV content online,

although that content is mostly limited to short highlights of shows.

Going forward, increased bandwidth availability will allow broadcasters and distributors to

deliver full-length catch-up TV and leverage the interactivity of the online medium to create

greater engagement with audiences.

Digital is enabling “virtual” audience participation: Broadcasters are using text messages and

interactive voice response (IVR) on mobile phones to increase engagement with audiences

during game and reality TV shows. Around 45 million urban Indians send text messages

during reality TV shows, which are charged at premium rates, in turn generating the majority

of broadcasters’ digital revenue.47 Broadcasters have also launched online versions of reality

TV shows targeted at young audiences, some of which allow users to participate in the

televised show.

Mobile TV adoption is expected to grow: The use of streamed mobile TV services is

increasingly popular among Indian audiences, with the recent Cricket World Cup and the

Indian Premier League driving uptake.48 Indians are 64% more likely to consume mobile TV

than the global average.49 The Government has also announced plans to allocate a dedicated

spectrum for mobile TV broadcast services on the Digital Video Broadcasting–Handheld

(DVB-H) platform.50 This will allow digital TV broadcast signals to be beamed directly to

DVB-H enabled mobile phones, and is expected to improve video quality and drive further

growth of the medium in India.51

TV content portals: Broadcasters expect increased broadband adoption and the introduction

of 4G to spur the demand for TV content portals and streaming content online. Broadcasters

are planning destination site for users, with multiple content and services and multiple

revenue streams. Broadcasters may also partner to aggregate popular shows and channels and

invest in services that allow catch-up TV, while sharing revenue, risks and costs.

Wireless broadband is expected to drive the reach of digital TV: Mandatory digitization and

fierce competition has increased pressure on DTH and digital cable operators to roll out

premium services, including HD, 3D and triple-play. 4G is expected to drive further product

innovation and hasten the introduction of VoD, peer-to-peer gaming and content portability.

Broadband availability could also kick-start the growth of IPTV and web TV, which have

faced limited uptake due to bandwidth constraints. (Ernst & Young, 2011)

INITIA TIVES

The Indian government's push towards digitalization and cable television by 2014, is

expected to drive DTH and digital cable growth. Also, sophisticated digital production and

postproduction complemented by the willingness of big corporate houses to invest in the film

value chain is influencing the film segment in India.

This is further aided by the development of digital distribution and exhibition through the

growth of multiplexes. As part of ‘Friendly Exchanges' between the two Asian giants, India

and China will mutually promote high level media co-operation. There will be specific

projects and proposals under the media domain to mark the commemoration of ‘Friendly

Exchanges' celebrations.

India and China have strong M&E sectors. Sharing experiences can only benefit both

economies. On a similar note, India and Senegal have enhanced their commitment to promote

sustained cultural exchanges by signing ‘Executive Programme for Cultural Cooperation' for

the period 2013–15.

REFE RENCE

1. Biswajit Sarkar|2012|

http://www.biswajitsarkar.com/fdi_in_entertainment_media.html

2. Ernst & Young | 2011 |

http://www.ey.com/Publication/vwLUAssets/Entertainment_economy_of_India/

$FILE/Indias-Entertainment-Economy_Oct_%202011_.pdf

3. IBEF (India Brand Equity Foundation)| December,  2013

http://www.ibef.org/industry/media-entertainment-india.aspx

4. S. Bridget Leena | October, 2013

http://www.livemint.com/Consumer/VBc0pn9cC97wxNMDfudsSM/South-

India-media-and-entertainment-industry-to-touch-Rs-43.html

Thank You